Thousands of patients scramble to avoid huge bills amid Anthem, Dignity contract dispute
Thousands of Californians are learning that they will have to foot a bigger portion of their medical bills if they want to continue seeing their doctor since Dignity Health severed its contract with Anthem Blue Cross of California on July 15.
The two health care giants are locked in a dispute over rate increases, but many patients had no knowledge of that until they received letters last week through the U.S. Postal Service.
Dated July 16, the letter let patients know that the coverage change had gone into effect a day earlier. It stated: “Unfortunately, Anthem would not agree to a new contract that would ensure we can sustain the services our patients and communities depend on. As a result, Dignity Health hospitals and physician offices are no longer considered in-network health care providers for Anthem PPO members effective July 15, 2021.”
In an interview Monday, Dr. Robert Quinn, the president and chief executive officer of Dignity Health Medical Foundation, told The Bee that a dedicated team from Dignity has been negotiating daily for six months with Anthem and continues to do so. Dignity serves roughly 1 million Anthem consumers, Quinn said, but some of them may be in plans not affected by this dispute.
“We would have preferred not to have gone to termination,” Quinn said. “It’s caused a significant amount of angst for our patients .... We’re getting calls in all our clinics across the state every hour. I think the biggest concern that patients have is: Will they be able to maintain the relationship with the doctors whom they’ve known and trusted for years?”
In a statement sent to The Bee on Monday, Anthem’s leaders said they had reached rate terms with other local health care providers and hoped to resolve the matter with Dignity.
“As we negotiate with providers, we try to strike a balance between protecting affordability and providing a broad network of providers to create choices, which can take time,” Anthem officials said in the statement. “Anthem has taken steps to help our members make seamless transitions to new care providers and facilities, and we have launched a continuity of care plan for people with special health circumstances. Anthem members continue to have access to the care from one of the many other quality providers participating in our local network, like Sutter Health and UC Davis Health.”
Quinn said that Dignity Health serves many of the sickest and most vulnerable Californians as the largest Medicaid provider in the state and that the nonprofit giant had been losing money in recent years. Citing budget woes in 2019, Dignity laid off roughly 110 workers.
CommonSpirit Health, the parent of Dignity Health, reported an operating loss of $550 million for the fiscal year ending June 30, 2020, and an operating loss of $617 million for its prior fiscal year. (The company received roughly $850 million in federal relief related to the COVID-19 pandemic in 2020, however. Without it, the operating loss would have been $1.4 billion that year.)
“New contracts with Anthem will let our doctors and nurses continue confronting the COVID-19 pandemic and providing essential services to our patients,” Quinn said in a statement sent to The Bee Monday. “Dignity Health has offered Anthem a proposal with rates that do not even cover hospital inflation costs and are below increases included in prior agreements.”
Anthem, however, noted in a news release that “Dignity rates are some of the highest among all health systems in California, making it almost 30 percent more expensive than other health systems in the state.”
Dignity charges consumers with commercial insurance more than four times what it bills Medicare recipients for some services, Anthem leaders said, and these rate increases result in higher out-of-pocket and premium costs for its customers.
Patients receive considerable discounts by choosing doctors within an insurer’s network, so many who need care have been scrambling to find primary care physicians and specialists who have contracts with Anthem.
In the Sacramento region, Dignity physicians are affiliated with Mercy Medical Group and practice at Sacramento’s Mercy General Hospital, Mercy Hospital of Folsom, Mercy San Juan Medical Center, Methodist Hospital of Sacramento, Sierra Nevada Memorial Miners Hospital in Grass Valley and Woodland Memorial Hospital.
Anthem officials said they had started to reach out to customers to let them know about choices, but if consumers have questions about changing providers or getting services authorized, they can contact Anthem at the number on the back of their insurance cards. Patients can also contact Dignity Health at 800-483-1568 if they have questions.
“Your Anthem plan may allow you to receive care from out-of-network health care providers and hospitals,” Dignity officials stated in the July 16 letter. “However, it may increase your financial responsibility if you use Dignity Health care providers.”
In order to ensure continuity of care, California lawmakers require that insurers continue to cover certain services at the in-network rate as long as the patient and their physicians submit the proper forms. For instance, patients can continue to receive chemotherapy, radiation or other types of acute care, and expectant mothers can continue to see their current obstetricians.
Anthem and Dignity officials noted that treatment for emergencies is always considered in-network and will be billed accordingly.
Dignity also has had recent contract disputes with Cigna and Aetna that resulted in disruptions for patients. Quinn said there could be other challenging negotiations ahead as the Dignity team continues to advocate for access and quality of care.
